WARREN - From paying off childrens' college costs to boosting the area's attractiveness to retailers and creating a market for natural gas-powered vehicles, the potential signing of gas drilling leases is raising spirits across Trumbull County.
"It's a once-in-a-lifetime event to get this kind of money. It'll be tremendous for truck and car sales, furniture, electronics," said a county business owner who asked not to be identified because he also owns some of the 85,000 acres in Trumbull County being leased by BP North America Natural Gas if final papers are signed.
The owner said the bonus money, plus expected increase in business sales, will come in handy for something not as glamorous as a new vehicle or big-screen TV.
"I'll use it to pay the college school bills for the kids," the owner said.
Members of the Associated Landowners of the Ohio Valley Monday night overwhelmingly approved terms with BP that call for an upfront bonus payment of $3,900 per acre, plus royalties of 17.5 percent on the gas and oil from wells.
The deal, which awaits the signing of final papers, perhaps by the end of April, would produce $331 million-plus for landowners, although a variety of taxes are expected to take 40 percent or more of any lump-sum payments. The money is expected to be paid in October.
"Most prudent people aren't pulling the trigger until they have the money. They're waiting to see if the deal is done," the owner said.
Area business officials said the deal may open the door to more investment in Trumbull County.
"We know Chesapeake (Energy) is putting an inline processing plant in Columbiana. One might suspect another might ne needed in Trumbull County or southern Ashtabula County," Regional Chamber President Thomas Humphries said.
Chesapeake has announced it will invest $900 million for a gas separation plant near Hanoverton and another in Harrison County, along with a pipeline to carry the gas.
Significant investments by Chesapeake and BP also may encourage other energy giants to follow suit.
"There are others sitting on the sideline. Is Shell going to be in that play?" Humphries said.
The area's largest retail business developer, The Cafaro Co., can use BP's investment to attract other retailers, restaurants and other businesses, a spokesman said.
"One thing our real estate development team does when trying to attract retailers is highlight the area's economic vitality and disposable income. The continuing good news absolutely is the kind of news that's welcomed," Joe Bell said.
Cafaro is moving ahead with an extended-stay hotel and banquet center attached to its Eastwood Mall in Niles. Bell said the project was considered before the shale gas boom began, but he said the new economic activity helps.
"We've seen it happen in other parts of Ohio and western Pennsylvania, where rental properties, residential housing and hotels are finding their rooms full. We believe the same pattern will repeat in the Mahoning Valley," he said.
The mushrooming supply of natural gas is causing energy companies to seek new customers. The auto industry looms as a major user of natural gas, a local auto dealer spokesman said.
Steve Bott, sales manager for Mark Thomas Ford in Cortland, said he attended a meeting of Ford Motor Co. and Chesapeake officials March 21 in Pittsburgh, where making natural gas-powered vehicles as a topic.
"Ford has the ability to convert certain vehicles for $6,000 to run on compressed natural gas," Bott said, adding the gas costs about $1.69 compared to $3.90 for a gallon of regular gasoline. "Over a four-year time frame, it pays for itself.
"They say this could go on for 50 years," Bott continued. "Kids could learn to be machinists, whatever is needed. It's something to keep our kids in our community."